UK telecoms group BT and mobile network operator EE have agreed a takeover deal. It comes less than two months after the companies entered into exclusive negotiations with each other.

Orange and Deutsche Telekom, which run EE as a joint venture, have chosen to receive different benefits from the sale of their shares. Orange will receive around £3.4 billion and a 4% stake in the combined BT/EE business. Deutsche Telekom will have a 12% stake in the new business and will be entitled to appoint a non-executive board member.

After four years, BT expects the combined business to be saving approximately £360 million per year.

The deal is subject to shareholder and regulatory approval, with a conclusion expected by March next year.

Gavin Patterson, BT’s Chief Executive, said “This is a major milestone for BT as it will allow us to accelerate our mobility plans and increase our investment in them. The UK’s leading 4G network will now dovetail with the UK’s biggest fibre network, helping to create the leading converged communications provider in the UK. Consumers and businesses will benefit from new products and services as well as from increased investment and innovation. The deal provides an attractive opportunity for BT to generate considerable value for shareholders, with significant operating and capital investment efficiencies supported by our tried and tested cost transformation activities. The enlarged BT will offer significant opportunities for employees as we lead the creation of a world-class digital infrastructure for Britain.”

EE was formed in 2010, after T-Mobile and Orange were merged. The company has about 13,000 employees, 580 retail stores and is responsible for more than 30 million mobile and fixed-line customers.